price mechanism
Definition
System of interdependence between supply of a good or service and its price. It generally sends the price up when supply is below demand, and down when supply exceeds demand. Price mechanism also restricts supply when suppliers leave the market due to low prevailing prices, and increases it when more suppliers enter the market due to high obtainable prices. Also called price system.
price mechanism is in the Economics, Politics, & Society subject.
price mechanism appears in the definitions of the following terms: demand and supply, price system, reflex effect, economics and market failure
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